In Re Station Casinos, Inc., Et Al., U.S.B.C
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Case 09-52477-gwz Doc 1175-1 Entered 04/07/10 21:32:28 Page 2 of 26 In re Station Casinos, Inc., et al., U.S.B.C. D. Nevada Case No. BK-09-52477 (Jointly Administered) BIDDING PROCEDURES IN CONNECTION WITH DEBTORS’ SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF STATION CASINOS INC. AND CERTAIN OF ITS DEBTOR AND NON‐DEBTOR OPCO SUBSIDIARIES A. Preliminary Statements 1. Set forth below are the bidding procedures (the “Bidding Procedures”) to be employed by Station Casinos, Inc. (“SCI”) in the chapter 11 cases (jointly administered) pending in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”) under case number 09-52477-GWZ (the “Chapter 11 Cases”) with respect to the proposed sale of certain assets and the assumption of certain liabilities (collectively, the “Sale”) of SCI and certain of its debtor subsidiaries (collectively, the “Opco Debtor Subsidiaries”) and its non-debtor subsidiaries (collectively, the “Opco Non-Debtor Subsidiaries”) (collectively, the “Opco Assets”) specified on Schedule 1 annexed hereto (the Opco Debtor Subsidiaries and the Opco Non-Debtor Subsidiaries together, the “Opco Subsidiaries” and the Opco Subsidiaries together with SCI, the “Opco Group”). 2. The Opco Assets do not include any of the following: (a) any assets of FCP Propco LLC (“Propco”), (b) any equity in or assets of any subsidiary of SCI that directly or indirectly owns the equity of Propco, (c) any assets encumbered by liens in favor of Propco or (d) any of the assets specified on Schedule 2 annexed hereto (collectively, the “Excluded Assets”) as more fully defined herein. None of the Excluded Assets will be the subject of the Sale. 3. The Sale is being conducted and shall be consummated pursuant to and in conjunction with confirmation of Debtors’ Joint Chapter 11 Plan of Reorganization for Station Casinos, Inc. and its Affiliated Debtors (Dated March 24, 2010) [Docket No. 1031-1] as the same may be amended, the “Joint Plan”) filed in the Chapter 11 Cases. 4. As used in these Bidding Procedures, the term “Consultation Parties” shall mean: (i) the Official Committee of Unsecured Creditors appointed in the Chapter 11 Cases (the “Committee”) and (ii) the Administrative Agent under the Opco Loan Agreement (the “Opco Agent”). B. Bidding Process 1. The Bidding Procedures set forth herein describe, among other things, the Opco Assets available for Sale, the manner in which Potential Bidders may gain access to or continue to have access to due diligence materials concerning the Opco Assets, the manner in which Potential Bidders and bids may become Qualified Bidders and Qualified Bids (as defined below), respectively, the receipt and negotiation of bids received, the conduct of any Auction (as defined below), the ultimate selection of the Successful 1 #4837-8019-0213 Case 09-52477-gwz Doc 1175-1 Entered 04/07/10 21:32:28 Page 3 of 26 In re Station Casinos, Inc., et al., U.S.B.C. D. Nevada Case No. BK-09-52477 (Jointly Administered) Bidder (as defined below), and the Bankruptcy Court’s approval thereof (collectively, the “Bidding Process”). 2. In the event of any dispute regarding the interpretation or application of these Bidding Procedures or the Bidding Process, the Bankruptcy Court will have exclusive jurisdiction to hear and resolve such dispute. 3. The Bidding Process will be conducted by the Debtors, under the direction of SCI's independent director, simultaneous with, and in furtherance of, the solicitation and confirmation of the Joint Plan. The approval of any Sale pursuant to these Bidding Procedures will be contingent upon confirmation of the Joint Plan and shall be consummated solely through the Joint Plan. In addition, the closing of any Sale may involve additional intermediate steps or transactions to facilitate consummation of such Sale, including additional chapter 11 filings and/or mergers or other corporate transactions of subsidiaries of the Debtors and such other actions or transactions necessary to implement the Plan. C. Assets To Be Sold 1. The Opco Group is offering for sale all or substantially all of the Opco Assets other than the Excluded Assets. The Excluded Assets will not be included in the Sale. 2. The Excluded Assets consist of assets that either (a) constitute the collateral of Propco and/or the lenders (collectively, the “Propco Lenders”) under various written security agreements; or (b) assets that are to be transferred to Propco or New Propco under the Joint Plan and/or pursuant to the Master Lease Compromise Agreement and all amendments thereto approved by the Bankruptcy Court. D. Bids for Individual Assets and Joint Bids 1. The Debtors believe that the Debtors’ estates will realize maximum value for the Opco Assets through an arms’’ length Sale of all or substantially all of the Opco Assets. However, the Debtors recognize that certain Potential Bidders may desire to acquire only a portion or portions of the Opco Assets to a third-party buyer. Accordingly, the Debtors, under the direction of SCI's independent director, will entertain, in their discretion: (i) bids for all or any portion or portions of the Opco Assets; and (ii) Joint Bids for all or substantially all or portions of the Opco Assets. 2. Each casino property to be sold may be sold separately. All primary customer data (“Primary Customer Data”) relating to a Primary Customer (as defined below) for each casino property shall be sold to the Successful Bidder for the applicable casino property on an exclusive basis and, as a result, only the buyer of a casino property can use such Primary Customer Data post-closing of the Sale. No Debtor or member of the Opco Group (if not sold to the Successful Bidder of the applicable casino property) shall be entitled to use any Primary Customer Data related to any casino property post- 2 #4837-8019-0213 Case 09-52477-gwz Doc 1175-1 Entered 04/07/10 21:32:28 Page 4 of 26 In re Station Casinos, Inc., et al., U.S.B.C. D. Nevada Case No. BK-09-52477 (Jointly Administered) closing of the Sale. No member of the Opco Group shall be entitled to sell the Primary Customer Data related to a casino property to any entity other than the buyer or transferee of such casino property. A customer is a “Primary Customer” of a casino if such customer plays his or her largest percentage of historical play at such casino. 3. Upon consummation of the Sale, the participants in a Joint Bid may decide to divide the Opco Assets amongst themselves and operate certain Opco Assets separately from others. In order to operate such stand-alone businesses, the ultimate buyers of the Opco Assets may need to resolve certain interdependencies among the various Opco Assets (the “Interdependencies”), including, without limitation, certain issues relating to the use of intellectual property or the provision of transition services by and between joint bidders. The Debtors do not intend, and shall not be required to undertake any obligation, to resolve any Interdependencies among the various Opco Assets. 4. After submission of an LOI (as defined below) and without limiting the terms set forth under the heading “Creditor Negotiations,” any unauthorized contacts between one or more Potential Bidders or Qualified Bidders without the prior written consent of the Debtors are hereby strictly prohibited and may result in disqualification from participation in the Bidding Process and any Auction that may occur, as determined by the Debtors in their sole discretion. Notwithstanding the foregoing, the Debtors shall have the right to contact parties who have expressed an interest in acquiring only a portion of the Opco Assets or in providing only a portion o the financing necessary to purchase the Opco Assets in order to facilitate the formation of Joint Bids for all or substantially all of the Opco Assets or expanded portions of the Opco Assets. E. Creditor Negotiations 1. Notwithstanding anything herein to the contrary and so long as it is reasonably practicable, a Potential Bidder that desires at any time to contact (whether in person or telephonically) the Committee, the Administrative Agent or the Propco Lenders or their respective advisors to discuss the terms of any bid made or to be made, such Potential Bidder shall coordinate such contact through the Debtors’ advisors (who shall promptly act on such request to facilitate such contact). F. Sale “As Is” 1. The Sale of the Opco Assets will be on an “as is” basis and without surviving representations or warranties of any kind, nature, or description by the Debtors, their agents, or estates. G. Free Of Any And All Claims And Interests 1. Except as may be agreed to by a Successful Bidder in its Purchase Agreement (as such terms are defined below), all of the rights, title and interests of the Opco Group in and to the Opco Assets, or any portion thereof, to be acquired as part of 3 #4837-8019-0213 Case 09-52477-gwz Doc 1175-1 Entered 04/07/10 21:32:28 Page 5 of 26 In re Station Casinos, Inc., et al., U.S.B.C. D. Nevada Case No. BK-09-52477 (Jointly Administered) the Sale will be sold free and clear of all pledges, liens, security interests, encumbrances, claims, charges, options, and interests thereon and there against (collectively, the “Claims and Interests”) as permitted by, and pursuant to, sections 105(a), 363, 365, 1123 and 1129 of the Bankruptcy Code, with such Claims and Interests attaching to the net proceeds of the sale of such Opco Assets, subject to the Debtors’ right to challenge the validity of such Claims and Interests.